At the start of this year, Myanmar’s army raided a logging operation in the Kachin State, arresting 155 Chinese citizens. This incident, in a conflict-prone region of Myanmar, highlighted an illegal cross-border timber trade worth hundreds of millions of dollars a year, which both governments have so far failed to address.
What the locals never expected was that these arrests, followed by a trial and presidential amnesty, would result in a diplomatic incident that garnered worldwide attention. According to Chinese workers who cut or transported timber in Kachin State, arrests and violence are commonplace.
One driver from Yunnan who has worked in Myanmar for years recalled seeing several Hunanese workers step on a landmine and be ‘blown to pieces.’ Many Chinese timber traders describe working in Myanmar as a “blood and sweat business,” but workers invest all their savings, or even go into debt, to come here: for the change to make a living, or maybe get rich. Reports put the number of Chinese citizens working in the mountains where the above raid took place at 1,600.
The Chinese media portrayed the arrested workers as pawns in a struggle for power and resources between the Myanmar government and the ethnic armed groups. But ironically, those arrested for ‘illegal logging’ are also the victims of that very crime, while the main culprits – the timber bosses who hired the labourers – go unpunished.
In a new report, EIA looks at the illicit cross-border timber trade, the individuals who control it and their business networks. Behind the apparent chaos those networks run well-organised supply chains with a very clear division of tasks, driven by corruption, money and a lack of regulation on the both sides to keep illegally felled timber flowing into China.
There is no question that Myanmar’s weaknesses in forest management and the conflict in regions bordering China make controlling illegal logging difficult. But EIA’s investigation found that if this is to be done, the first task is to put an end to illegal timber trading across the Chinese border.
Myanmar law mandates that all wood should exit the country via Yangon port. Therefore the huge and long-standing overland trade with China, as documented by EIA and other groups, is illegal. Most of China’s border with Myanmar lies within Yunnan, and as the EIA report reveals, Yunnan companies play a major role in the illicit cross-border trade. An analysis of Chinese customs data shows that in 2014 the majority of logs imported from Myanmar (70% of teak and 95% of rosewood) were imported by 40 or so trading firms in Yunnan. In 2013 95% of Myanmar forestry products imported into China cleared customs in Yunnan.
Despite Myanmar’s 2014 ban on log exports, the country is still China’s fifth largest supplier of logs (by quantity). Three tax receipts show that the boss of the workers arrested in the raid above had, in the week of the raid, imported over 300 tonnes of logs from Myanmar and paid taxes into state coffers.
This illicit trade has a long history and the two countries have in the past worked together to combat it. In May 2006 the provincial government in Yunnan implemented new rules on the timber trade with Myanmar. This required timber ‘cooperative projects’ to obtain advance approval; timber importers to be registered (with a limit of five such firms per prefecture); and for approval from the Myanmar government to be obtained by relevant projects and importers. But these rules only had a short-term effect, and the illicit cross-border trade has recovered to its earlier peak.
China and Myanmar are engaged in bilateral discussions regarding the trade in raw material and timber from Burma that should be opportunities to provide solutions.The arrest of the 155 Chinese citizens early this year and the EIA investigation into the illicit timber trade should provide both sides with a clearer sense of the direction to take.
If those talks are to make real progress, China must, as an importer, respect Myanmar’s restrictions on timber exports and put the laws and policies in place to prevent timber (and logs) which are illegal under Myanmar law from entering China. As I have already written previously,China urgently needs enforceable rules to stop illegal timber entering the country.
But before that law is in place there are measures China can take immediately.
1. Revise the Yunnan Temporary Management Rules for Timber and Mining Cooperation with Myanmar to respect Myanmar’s ban on log exports, ending approvals for log imports.
2. Further revise those rules to temporarily suspend all permits for overland timber imports from Myanmar, in line with Myanmar law. Then investigate the operations of all companies holding permits: EIA investigations and customs data shows that it is common practice for trading companies in Yunnan holding those permits to provide services to numerous individual traders, allowing them to bring timber from Myanmar as “small scale border trade” under the company’s name. This may breach Article 14 of the Measures for Management of Small-scale Border Trade and Economic and Technological Cooperation in Border Areas.
3. Rosewood(Hongmu) makes up the bulk of the China-Myanmar timber trade, and the Chinese authorities should waste no time in tightening restrictions on the import of the wood from Myanmar. According to the Measures for Management of Certification for Import and Export of Wildlife and Plants, exports of rosewood originally from Myanmar from China require proof of legal sourcing. However, such imports require only proof of origin.
Global timber markets have taken legal and regulatory measures to exclude illegal timber from their markets it is time for China a major consumer to do the same.
